Dorsey, Wright & Associates

Dorsey, Wright & Associates

Dorsey, Wright & Associates was founded in 1987 by Tom Dorsey and Watson Wright in Richmond, Virginia, and later moved to New York. The firm built its reputation on Point & Figure charting, a method of technical analysis that filters out minor price movements to focus on significant trends. Over three decades, this methodology evolved into a systematic relative-strength framework used to rank exchange-traded funds across asset classes and sectors. The firm's core strategy identifies ETFs with the strongest price momentum and rotates capital into those vehicles at regular intervals. A typical portfolio might hold Treasury bond ETFs, technology-sector funds, or commodity-linked products depending on the signal. The approach is not fundamental analysis — it is purely price-driven. The flagship Dorsey Wright Technical Leaders Index, licensed to Invesco for the PowerShares DWA Technical Leaders ETF (PDP), selects approximately 100 US-listed companies with high relative strength. Other index mandates have covered international equities, fixed income, and sector rotation, with licensees including First Trust and Nasdaq. As of its acquisition by Nasdaq in 2015 for $225 million — integration intended to bolt systematic indexing onto Nasdaq's exchange and analytics business — the firm's indexes had roughly $7 billion in tracking assets (per press reports, 2014). The team operated as a sub-brand within Nasdaq's Global Indexes division, with Tom Dorsey remaining involved in research before retiring. Nasdaq now markets the DWA-branded indexes to ETF issuers globally, with products listed in the United States, Europe, and Asia. Dorsey Wright's structural differentiator is that it never managed a fund. The firm acted purely as an index provider and research licensor — a model that separated strategy design from capital management. That architecture allowed the same methodology to appear in competing fund families simultaneously, a structure more common in fixed-income indexing than in rules-based equity selection.